L-R: Vikram Seth (DIHL, Chief Executive Officer), Richard Solomons (IHG, Chief Financial Officer & Head of Commercial Development), Navneet Bali (DIHL, Chief Investment Officer) and Jan Smits (IHG, Chief Executive Officer, Asia Australasia)
New Delhi, India, 6 April 2011 – IHG (InterContinental Hotels Group) [LON: IHG, NYSE:IHG (ADRs)], the world’s largest hotel group by number of rooms, has signed a joint venture partnership with Duet India Hotels Group (DIHL), the hotel investment arm of global asset manager Duet Group, to develop 19 new Holiday Inn Express hotels across India.
IHG will invest through a 24% equity stake, making a multi-year investment of US$30 million into the partnership. This investment will go into a fund to support the building of the 19 hotels over the next five years. These 19 Holiday Inn Express hotels will add approximately 3,300 rooms to IHG’s current India development pipeline of over 10,000 rooms (46 hotels) and are expected to be operational by 2016.
Richard Solomons, IHG’s Chief Financial Officer and Head of Commercial Development, said, “This deal is a great example of our strategy in action. By investing a small amount of our own capital we have established a strategic relationship with a fantastic partner who knows the market, securing a future fee stream and opening up a huge opportunity for us to develop the Holiday Inn Express brand across India. With strong economic growth and an expanding middle class in India, we forecast strong future demand for mid-market and select service hotels, cementing Holiday Inn Express’ position as one of the fastest growing brands in the hotel industry.”
Upcoming Holiday Inn Express hotels will be primarily located in India’s major metros and key secondary cities, which are well positioned to drive growth and continued investment opportunities including New Delhi, Mumbai and Bangalore.
“This venture marks a significant milestone for IHG. With these 19 new signings, we continue to add momentum to our current India development pipeline. IHG is strongly positioned to build a significant India footprint with a growing presence in India’s key business and leisure hubs. Overall, we are on track to have a 150-hotel presence by 2020. The Holiday Inn Express brand will address the need for internationally branded and high-quality hotels for domestic travellers,” said Jan Smits, Chief Executive Officer of IHG Asia Australasia. “Across the region, over the course of 2010 we signed new Holiday Inn Express deals in key locations including India, Singapore and Thailand. The growing presence of Holiday Inn Express in this region strengthens the brand’s portfolio and introduces the brand to new guests.”
Holiday Inn Express is one of the fastest growing hotel brands in the industry, opening on average two hotels a week globally. There are now 2,075 Holiday Inn Express hotels open and 494 hotels under development around the world. In India, over 75 percent of IHG’s India pipeline is with the Holiday Inn family of brands.
Henry Gabay, Co-founder and Chairman, Duet Group, said, “We are extremely excited to partner with IHG and bring the fast-growing Holiday Inn Express brand to India. Mid-market hotels are the core focus of our hotel business in India and this deal will support the expansion of our growing hospitality development portfolio to its targeted 5,000-6000 rooms from 1,250 rooms today. IHG’s 48-year track record in and continued commitment to India as well as Holiday Inn Express’ strong brand presence and proven product globally make it an ideal partner for a fully integrated hotel development company like DIHL.”
“The mid-market hotel space in India offers a compelling investment proposition given favourable demand-supply dynamics and an attractive build cost to operating returns equation. The strategic partnership with IHG provides DIHL with a strong platform to tap the full potential of this opportunity,” said Anuj Gupta, Managing Partner and CEO India, Duet Group.
IHG hotels in India
Current Size: 12 Hotels and 2191 rooms
InterContinental: 4 open with 2 in the pipeline
Crowne Plaza: 3 open with 9 in the pipeline
Holiday Inn: 5 open with 28 in the pipeline
Holiday Inn Express: 0 open with 7 in the pipeline*
*The IHG-Duet joint venture will see 3 active developments at the inception, with more developments being added progressively
For further information please contact:
Heather Wood / Catherine Dolton
+44 (0) 1895 512 176
+65 6395 6109
+44 (0) 1895 512 426